Federal Government Solar Battery Rebate
Big changes came to the solar battery scene in Australia from July 2025. A nationwide Federal Government home battery rebate scheme called the Cheaper Home Batteries Program was launched, making home batteries much more affordable for everyday Aussies.
The program aims to support the installation of over 2 million household batteries by 2030. Following its launch, the government announced an increase in funding for the Cheaper Home Batteries Program from $2.3 billion to $7.2 billion over the next four years.
Here’s how the Cheaper Home Batteries Program works and what it means for Sydney homeowners.
Cheaper Home Batteries Program: The Basics
The federal government solar battery rebate initiative (often referred to as the Cheaper Home Batteries Program) provides an upfront discount of around 30% off the cost of installing an eligible home battery system. Importantly, this isn’t a cash-back or tax rebate you claim later. It’s delivered similarly to how the solar panel STC rebate works, meaning you get the saving applied upfront by the battery installer, who then handles the certificates/credits on the back end.
The rebate value is tied to the battery’s capacity. Specifically, the government is expanding the existing Small-scale Renewable Energy Scheme (SRES) to include batteries. Under the SRES, systems earn certificates (STCs) based on their energy output/capacity, and those can be traded for cash. For batteries, it’s up to $300 per kWh of usable battery capacity in 2025-26 (the exact $ per kWh can fluctuate with certificate prices). There is a cap of 50 kWh per property, which is more than enough for virtually all homes (that cap is really to prevent, say, a warehouse or factory claiming a “home” rebate on an 100 kWh system).
Only one solar battery system per premises is eligible for STCs, and STCs can only be claimed for the first 50 kWh of a solar battery’s usable capacity. The rebate is calculated using a tiered system: the first 14 kWh of capacity receives 100% of the rebate rate, 14–28 kWh receives 60%, and 28–50 kWh receives 15%.
The Clean Energy Council maintains lists of approved batteries that meet Australian and international standards, and eligible batteries must be listed on the Clean Energy Council approved product list. Solar batteries must meet relevant Australian standards, specifically AS/NZS 5139:2019.
In plain English: If you installed a 10 kWh battery, you might get around $3,000+ off; if you installed a 5 kWh, maybe around $1,500+ off, etc. These are ballpark figures, we’ll know the precise formula once the program is fully live, but that’s the order of magnitude.
Eligible batteries must demonstrate virtual power plant readiness, meaning they can connect to the electricity grid and respond to signals, and the inverter connected to the solar battery must be capable of participating in a virtual power plant (VPP). So if you have an older system you may need your solar inverter replaced with a modern unit.
Solar Battery Rebate Eligibility Conditions
- New or Existing Solar: Your battery must be connected to a solar PV system (either one that’s already on your roof or a new one installed alongside the battery). The idea is to encourage storing renewable energy, not just charging from the grid. Only one solar battery system per premises is eligible for STCs; additional batteries added to existing systems are not eligible for further STCs after the first claim.
- VPP-Ready: The battery system likely needs to be “VPP-capable”. This means it has the smarts to participate in a Virtual Power Plant program. Practically all modern batteries (Tesla, BYD, Alpha, etc.) qualify – they have internet connectivity and can be controlled remotely. You don’t necessarily have to join a VPP, but the battery should have the capability. This ensures the government’s investment could help the grid if owners opt in.
- Installed by the Pros: Only battery installations carried out by an accredited installer will qualify for the federal battery rebate. Your installer must be accredited with Solar Accreditation Australia, ensuring they meet strict standards for safety and quality. This protects your investment and gives you peace of mind.
- Residential, Business & Community: The program isn’t just for homes, it extends to small businesses and community buildings too. And it’s not means-tested (no income restrictions). The goal is broad adoption.
Those are the main points. Essentially, if you’re a normal homeowner with solar panels, you’ll qualify. You’d get the rebate whether you’re adding a battery to existing solar or putting in a whole new solar + battery system.
How Much Will It Save Me?
Let’s consider an example: Say you’re installing a 13.5 kWh Tesla Powerwall 3 (just to pick a popular battery). At roughly $15,000 installed cost currently, a 30% rebate could knock about $4,000 – $5,000 off that price. That’s huge! Suddenly that Powerwall might effectively cost ~$10k or less. If you were eyeing a smaller battery in the ~5 kWh range that costs, say, $6,000 installed, 30% off would save you around $1,800, bringing it down to ~$4,200. These kinds of savings will shorten the payback time of batteries by a number of years and help you save money on your energy bills.
The government estimates most households will save $300 – $400 per year on bills thanks to a battery (that’s on top of solar savings). In fact, a typical 10kWh battery can reduce electricity bills by $700–$1,500 per year, depending on usage and prices. This means you can enjoy lower electricity bills and significant cost savings over the life of the battery. If the battery lasts 10+ years, that’s a few grand in bill savings, plus whatever value you place on backup power, etc. With the rebate cutting the upfront cost, the math starts to look quite favourable, especially for larger families who use a lot of power in the mornings and evenings.
Another neat aspect: because the federal rebate is via the STC system, it will decline slightly each year (as STCs do) until 2030. So the earliest adopters (2025-26) get the biggest rebate per kWh, and it tapers down over time. That provides a little encouragement to not wait too long. The rebate is highest in 2025 and gradually reduces by about 7% per year in line with the existing SRES reduction schedule. By 2030 it phases out (as it’s expected battery prices by then will be much lower and more people will have them).
Big change from 1 May 2026: Tiered support for larger batteries
From 1 May 2026, the government has flagged changes to the Cheaper Home Batteries Program – a tiered structure (again: subject to regulations being made) aimed at keeping support appropriate across small, medium and larger batteries.
Here’s the structure you should plan around:
- Up to 14 kWh: higher rate remains (full support)
- 14–28 kWh: ~60% of the normal support rate
- 28–50 kWh: ~15% of the normal support rate
Additionally, the rebate for batteries will decrease every six months starting from 1 May 2026.
This is why many households are looking to move sooner: average home-sized batteries stay well supported, but oversizing gets less incentive after that date. The government has announced it is expanding funding to an estimated $7.2 billion over the next 4 years (up from earlier estimates), reflecting strong uptake.
Stacking with NSW Solar & Battery Rebates
A common question in NSW is whether you can combine the old NSW battery installation discount with the federal battery discount. The short answer: no — NSW battery installations can’t claim both the NSW and Australian Government battery installation discounts. However, you can still access NSW incentives related to connecting your battery to a Virtual Power Plant (VPP), and batteries installed under the federal program can be connected to a VPP.
The program is intended to complement other Commonwealth, state and territory government incentives, so homeowners should also check for additional support from their state and territory governments.
The practical takeaway for Sydney homeowners
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Installing solar batteries allows you to store excess solar energy generated during the day for use during peak times, helping you save money on electricity bills and increase your energy independence.
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If you’re looking at a standard household battery size (often ~10–14 kWh), you’re in the range the program is clearly trying to keep attractive even after May 2026.
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If you’re considering a much larger system, be aware that the incentive per extra kWh is expected to drop sharply after 1 May 2026.
- Either way, the right battery is about fit (load profile, solar size, tariff, export limits, and whether you want backup) — not just chasing the biggest kWh number.
In summary, the federal battery rebate is a game-changer. It signals that home batteries are moving from a niche, early-adopter product to a mainstream home appliance over the next few years. The government wants more stored solar in the grid to help smooth out energy supply, and they’re literally putting money on the table to make it happen.
Curious about the solar battery rebate and what you could save? We’re happy to give you a run-down based on your situation. If you’ve been holding off on a battery due to cost, now might be your golden moment. As always, Solar Repair Sydney offer obligation free quotes and can incorporate the projected federal rebate and any NSW incentive into the pricing so you see your true out-of-pocket cost. Let’s make your home’s solar energy go further!
